THE STOCK MARKET may see more volatility this week as investors await the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).
On Friday, the Philippine Stock Exchange (PSEi) index fell 0.37% or 24.84 points to close at 6,616.51, while the broader all-share index rose 0.08% or 3.34 points to 3,752.73.
Nevertheless, week by week, the PSEi rose by 1.67% or 112.63 points from 6,729.14 closing on Dec. 6.
“The local market continues to move sideways with a bearish bias as investors maintain a cautious attitude, weathering the ongoing headwinds while waiting for positive leads,” said Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco in a Viber message.
“Chart-wise, the market so far has not been able to break above its 10-day moving average. The good thing is that the market has held its position above 6,600,” said Mr. Tantiangco.
This week, the Fed and BSP meetings will be the main drivers of market trading, he said.
“Investors are expected to look ahead to the policy rate decisions of the Federal Reserve and the Bangko Sentral ng Pilipinas. The rate cut by these two and the indications of further improvement are expected to increase sentiment that could help the market reach a positive conclusion,” he added.
“We expect increased trade and price movements this week as investors anticipate and react to the upcoming policy rate decisions of the Federal Reserve and the BSP. Both are expected to cut their interest rates by 25 points (bps), which should encourage some tightening,” said Juan Paolo E. Colet, managing director at Chinabank Capital Corp., in a Viber message. “However, investors will be keeping a close eye on the institution’s outlook each about rate cuts next year. Any hint of fewer, slower, or no rate cuts could send stock markets into a tailspin.”
Mr. Colet has placed immediate support for PSEi at 6,550 and resistance at 6,750-6,850.
The Fed will hold its final policy meeting of the year on Dec. 17-18, while the BSP’s Monetary Board is scheduled to hold its review on Dec. 19. interest by 25 bps this week.
Mr. Tantiangco added that investors will also monitor the performance of the peso against the dollar this week.
“A further decline in the local currency may weigh on football,” he said.
He placed PSEi immediate support at 6,600 and major resistance at 6,000.
“From a valuation point of view, the local market is always at an attractive level and is therefore ripe for hunting. However, investors are expected to continue to wait for positive catalysts before entering the market strongly,” added Mr. Tantiangco. – Sheldeen Joy Talavera
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